Britain’s industrialization occurred well before the advent of full democracy, a historical pattern with significant implications for today’s developing countries—especially China—and one that closely echoes Lee Kuan Yew’s economic-first approach to nation-building. Drawing on insights from Yi Wen (The Making of an Economic Superpower, 2016) and Ha-Joon Chang (Bad Samaritans, 2007; Kicking Away the Ladder, 2002), this perspective challenges mainstream development theories such as Acemoglu and Robinson’s “inclusive institutions” thesis. Instead, it emphasizes the primacy of strong state capacity and proper economic sequencing over the early establishment of democratic institutions.
1. Industrialization Before Democracy: Lessons from Britain’s Historical Experience
Britain’s path to modern economic power offers clear historical evidence that industrialization often precedes, rather than follows, democratic development. The country underwent rapid industrial transformation in the late eighteenth and early nineteenth centuries, yet political participation remained highly restricted for decades thereafter. Even after the 1832 Reform Act, the right to vote was limited to a small fraction of the population—only about 18 percent of men—and universal suffrage was not achieved until 1928, nearly a century after the Industrial Revolution was well underway. This temporal gap underscores that broad democratic inclusion was not a prerequisite for industrial takeoff.
More fundamentally, Britain’s rise was driven by strong state capacity rather than democratic political form. Its ascent occurred under a centralized, mercantilist state that actively shaped markets, protected domestic industry, and mobilized resources. The Glorious Revolution of 1688 is often portrayed as a democratic milestone, but its most immediate impact was to strengthen the state’s ability to tax, regulate trade, and support economic expansion—not to establish mass political representation. As Yi Wen succinctly argues, democracy struggles to function without the material foundation provided by industrialization, while industrialization itself depends on a capable and assertive state. Britain’s experience therefore challenges linear models of political development and provides compelling evidence that economic transformation commonly lays the groundwork for democracy, rather than emerging from it.
2. Implications for Developing Countries
A. Democracy as a Destination, Not a Point of Departure
The historical record of post-colonial development strongly suggests that democracy is more often the culmination of economic transformation than its initial cause. Many newly independent states adopted democratic systems at an early stage of nation-building, yet failed to achieve sustained industrialization. Lacking the economic foundations necessary to support broad political participation, these countries frequently encountered governance challenges, including policy volatility, short-term populism, and the absence of coherent long-term industrial strategies.
Comparative historical patterns instead point to a sequential process in which industrial expansion generates rising incomes, social stability, and an educated workforce, thereby creating the material conditions for durable democratic institutions. When key stages such as proto-industrialization, light manufacturing, and heavy industry are bypassed, early democratization can exacerbate economic fragility rather than resolve it. In this sense, democracy functions most effectively as an endpoint of development—emerging from accumulated social wealth and state capacity—rather than as a starting point imposed before those foundations are in place.
B. State Capacity over Political Form in the Process of Industrialization
Historical experience demonstrates that the effectiveness of the state matters far more for industrialization than the specific political form it takes. Britain’s economic ascent was not driven by democratic governance, but by a capable, commercially oriented, and mercantilist state that actively shaped markets and production. Through instruments such as the Wool Acts, colonial trade networks, and naval dominance, the British government created both domestic and global markets while organizing supply chains and protecting nascent industries from external competition.
This pattern highlights the central role of state capacity in coordinating economic transformation. Britain’s government did not merely regulate markets; it constructed them, mobilizing resources and aligning public authority with private enterprise to accelerate industrial growth. Infant industry protection and strategic intervention were essential to building competitive manufacturing capabilities during early stages of development.
A similar logic can be observed in China’s rapid industrialization, which has relied on a strong developmental state capable of mobilizing capital, building large-scale infrastructure, and nurturing markets over extended time horizons. In contrast, neo-liberal approaches that seek to depoliticize the economy and minimize state involvement often weaken government capacity for long-term strategic investment. Such prescriptions may constrain precisely the kind of coordinated, forward-looking action that is critical during the formative phases of industrialization, when market forces alone are insufficient to drive structural transformation.
C. The Real Barrier to Development: Market Absence, Not Democracy
Poverty in many developing countries often stems not from a lack of democratic institutions but from missing markets. When markets are underdeveloped or fail to coordinate economic activity, industrial investment becomes unprofitable and growth stagnates. The core challenge is therefore structural: creating the conditions in which production, trade, and entrepreneurship can thrive.
History demonstrates that strong states can actively engineer market formation. Britain, over centuries, used mercantilist policies to expand trade networks, protect nascent industries, and integrate domestic and international markets. Similarly, China relied on township-village enterprises (TVEs) and export-oriented light industry to stimulate local production, link communities to broader markets, and foster industrial takeoff. These examples illustrate that the absence of functioning markets, rather than the absence of democracy, is often the real obstacle to economic development.
D. Democracy versus Market Logic in Economic Development
Economic development often reveals a fundamental tension between democratic principles and market incentives. Market logic, in which resources and influence flow according to capital ownership (“one dollar, one vote”), naturally favors industrial investment and long-term growth. By contrast, democratic logic (“one person, one vote”) prioritizes the preferences of the majority, who may favor immediate redistribution or short-term benefits over strategic industrial policies. This divergence can create conflicts between political priorities and economic imperatives, particularly in the early stages of industrialization.
Historical examples illustrate how successful economies have navigated this tension. In Britain, political enfranchisement was delayed, allowing industrial investment to flourish under a strong state without the constraints of broad democratic pressures. In China, the state maintained direct control over investment and market coordination, ensuring that industrialization proceeded according to strategic economic objectives rather than popular political demands. These cases suggest that sequencing and state capacity can reconcile the conflict between democratic pressures and market logic, enabling industrial growth before full political democratization.
E. Industrialization Paves the Way for Genuine Democracy
Historical experience suggests that industrialization is a prerequisite for functional democracy rather than its immediate foundation. Only after economies achieve sustained industrial growth do the social and economic conditions emerge to support broad political participation. Industrialization generates a middle class, an urban workforce, and a reliable tax base—critical pillars for stable, accountable governance. Without these foundations, democratic institutions often struggle to operate effectively, leaving political structures vulnerable to short-term populism or instability.
This sequencing—prosperity first, political evolution later—can be observed across successful industrializing nations. By establishing economic strength and social capacity before extending democratic rights widely, states create the conditions for lasting, meaningful democracy. In this sense, industrialization does not merely coexist with democracy; it enables the material and institutional groundwork that makes genuine democratic governance possible.
F. Institutional “Overhead” and the Challenges of Premature Democracy
The functioning of a genuine democracy depends on costly institutional infrastructure, including courts, regulatory agencies, inspection systems, and professional bureaucracies. These structures are essential for enforcing laws, protecting rights, and managing public resources, yet they require significant financial and administrative capacity to operate effectively. Without them, democratic systems are prone to inefficiency, corruption, and instability.
In many low-income countries, governance challenges often arise not from malice but from the inability to sustain these high-functioning institutions. Attempting to implement full democratic structures before the state has developed the resources and capacity to support them can destabilize economies and weaken public trust. In this context, the so-called “institutional overhead” highlights why political development often follows, rather than precedes, economic and administrative strengthening.
3. Lessons from Lee Kuan Yew: Singapore as a Modern Case Study
Singapore’s development under Lee Kuan Yew offers a compelling modern case study of how economic prosperity can and should precede full democracy. As detailed in Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World (MIT Press, 2013), Lee emphasized that a competent, efficient government is essential for stability, resource organization, and meeting citizens’ basic needs. He argued that leaders must make firm, long-term decisions, allocate scarce resources effectively, and prioritize raising living standards while rewarding contribution rather than wealth. According to Lee, democracy requires a vigilant and educated electorate, as well as strong institutions; introduced too early, it can lead to instability, irrational voting, and weak governance. Law, order, and disciplined development, he insisted, are prerequisites for sustainable democratic systems.
A cornerstone of Lee’s philosophy was pragmatic sequencing: economic development and nation-building must precede political liberalization. Echoing Britain’s historical industrialization-before-democracy trajectory, he famously argued that “a country cannot be democratic first and rich later.” Singapore initially focused on building a robust economy, modern infrastructure, and social cohesion, permitting limited political liberalization only after these foundations were firmly in place. This approach allowed the state to consolidate authority and coordinate development without succumbing to the instability that premature democracy can generate.
Lee also underscored the importance of a strong, pragmatic state as a market creator. His government was technocratic, business-oriented, and capable of long-term strategic planning, actively encouraging industrial estates, export-oriented policies, and the development of skills, jobs, and human capital. The state managed foreign investment and trade to ensure that markets functioned effectively in support of industrial growth. He warned that premature adoption of Western-style liberalism would have destabilized Singapore’s fragile economy, illustrating the centrality of state capacity over political form in early development.
Industrialization, Lee argued, is the precondition for meaningful political evolution. Economic success legitimizes government authority, fosters a growing middle class, and generates social stability, which collectively create the material and institutional basis for democracy to function effectively. Singapore’s experience aligns closely with Yi Wen’s insights: industrialization provides the foundation for subsequent political reform, ensuring that democratic freedoms are sustainable and grounded in social and economic reality.
From Singapore’s trajectory, several policy lessons emerge. First, sequencing matters: infrastructure, industrial capacity, and human capital must be developed before democratization. Second, strong state institutions are critical for guiding markets, protecting industries, and attracting investment. Third, democracy should follow economic maturity, not precede it. Finally, premature adoption of advanced Western political institutions can jeopardize stability and long-term development. Lee Kuan Yew’s approach provides a modern, pragmatic blueprint for economic-first nation-building, illustrating the interplay of state capacity, industrialization, and the eventual emergence of sustainable democracy.
4. Policy Implications for Developing Countries
- Emphasize economic sequencing over early political reform: advance from proto-industrialization to light industry and then to heavy industry.
- Develop strong state capacity as an active market creator, not merely a regulator: support credit, infrastructure, and trade, similar to China’s use of township-village enterprises (TVEs).
- Implement industrialization gradually and strategically: prioritize villages before megacities, and light industry before heavy industry, avoiding abrupt “shock therapy” approaches.
- Dispel the notion that democracy drives growth: economic development generates the social and institutional foundations necessary for democracy.
- Resist the temptation to “kick away the ladder”: refrain from adopting advanced Western institutions before achieving sufficient economic maturity.
5. Summary & Implications
Historical and contemporary experience points to a clear principle: industrialization depends on strong, pragmatic, state-led market creation rather than early democratization.
Britain achieved industrial growth well before universal suffrage. In the modern era, China’s developmental state exemplifies how this model remains effective, while Singapore under Lee Kuan Yew illustrates that prioritizing economic sequencing before political liberalization produces sustainable prosperity.
The lesson is straightforward: develop markets first, secure economic growth, and allow political evolution to follow. This time-tested strategy continues to guide China and other late-developing nations today.
References
- Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World. Lee Kuan Yew. The MIT Press, 2013.
- Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. By Ha-Joon Chang, 2007
- Kicking Away the Ladder: An Unofficial History of Capitalism, Especially in Britain and the United States. By Ha-Joon Chang, 2002
- The Making of an Economic Superpower: Unlocking China’s Secret of Rapid Industrialization. Yi Wen, World Scientific. 2016